I’m not going to make this unnecessarily long by explaining everything there is to know about stock Daddy you are as brave as leonardo as smart as donatello you are the best shirt , I’ll instead get straight to the most relevant things you need to know to follow along. DFV aka roaring kitty aka Keith Gill, is the brilliant legend that gifted reddit with the knowledge and proof that Gamestop is a great investment, who owns 100,000 shares. He also owns (500) $12 strike call options that expire on 4/16, giving him the option to purchase a total of 50,000 shares for $12 each prior to that date. As each share of GME is substantially higher than the strike price, these calls are considered very deep ‘in the money’ (ITM) as their intrinsic value is GME current share price $181 minus $12 strike price = $169 gross profit per share x100 shares (not including the cost of the option contract itself
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so they are indeed quite valuable. However, as all options contracts expire, they also have ‘extrinsic’ value, which is basically a Daddy you are as brave as leonardo as smart as donatello you are the best shirt of how volatile the stock is, and how much time is left before expiration. This portion of options valuation is quite literally the embodiment of the phrase “time is money”. Even though the option contracts he owns are extremely valuable, and rise (and fall) exponentially in lock-step with GME stock price movement – he is losing money every single day due to ‘theta’, one of the many metrics used to assess the value of an option – and he’s letting that happen on purpose, which is obviously not a great trading strategy.